Cost estimates for the construction of River Place, a mixed-use project that is replacing the Water Street parking deck in downtown Wilmington, have increased by several million dollars since the original development agreement was approved in June 2016.
In the revised agreement, the city of Wilmington and East West Partners, the Chapel Hill-based firm developing the project, are splitting an additional cost of $7.6 million, according to a release from the city. The city’s additional cost would be $3.65 million and East West Partners cost would be $3.94 million.
“The design for River Place was started two years ago. During this time, construction costs have escalated significantly. East West Partners has absorbed these costs and made creative adjustments in its plans, in both design solutions and construction methods, to partially accommodate these increased costs without sacrificing the quality of River Place," Roger Perry, owner of East West Partners, explained in an email. "In spite of these creative solutions, our final budget has, nonetheless, increased during this period by over $5M. It is perfectly understandable that the same has happened to the city’s budget for the parking deck. This has been a very collaborative effort in creating a public-private partnership, and we are confident that as the city goes through this necessary process, it will see the value in making these budget adjustments so the project can proceed immediately."
Working with the general contractor Barnhill Construction on the project details, the city said revised cost estimates reflect construction price increases.
City spokeswoman Malissa Talbert attributed the cost increases to additional work on the site, finalizing design plans and an improving economy leading to higher costs since the price agreements were approved.
Cost of development was originally expected at about $75.6 million, but the new total in the development agreement that will be put to city council this month is around $83.2 million, according to numbers released by the development group.
Talbert said the city's previous cost was at $19.7 million, but the city’s estimated cost with the change is now at $23.4 million.
Designs for the 13-story River Place project include condominiums, apartments, restaurants, a fitness studio, other commercial tenants and a new parking deck.
Officials had previously said construction of River Place was scheduled to be complete by mid-2019. The project appeared to experience delays
after a ceremonial groundbreaking
event in May.
The price adjustment is one of the next steps the city is taking in its public-private partnership with East West Partners toward the upcoming demolition of the old Water Street Deck and construction at the site, city officials said in the release.
Perry said Friday that another major factor in the cost is the price of labor, which has "increased significantly" since discussions about the project began.
As for the project timeline, Perry added, "These things are complicated and they take a long time, and I don’t think it’s been slow; I think it’s been at a normal pace."
He said the first phases in the project are still expected to be ready late in the first quarter or early in the second quarter of 2019.
Almost 50 percent of the retail space has been leased out and 70 percent of the condominiums have been sold, Perry said Friday.
“The market has been very receptive,” Perry said. “We are really excited about the building … and we’ve enjoyed working with the city on the project. It's energizing and exciting because it’s such an incredible project.”
The revised agreement will be up for a public hearing and approval by Wilmington City Council members at their Aug. 15 meeting. If the council approves the new agreement with the added cost of construction, demolition could begin in October, Talbert said.